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2. (35 points) DigiPro is a computer manufacturing company active in Europe and Australia. Recently, DigiPro has decided to enter the healthcare market and produce
2. (35 points) DigiPro is a computer manufacturing company active in Europe and Australia. Recently, DigiPro has decided to enter the healthcare market and produce dental examination kits. According to their estimations, the current market demand for this product is 50,000, and it will grow annually at 10%. DigiPro needs to determine the capacity of this new plant considering different cost and revenue components. The total cost of developing a manufacturing plant to produce these kits is $1,200,000. Each kit can be sold for $4. The unit production cost of each item is $0.6 Depending on the capacity, machine maintenance cost is $0.5 per capacity unit. Considering all these components, calculate the cash flow for the next 10 years. First, find the optimal capacity considering a 10% discount rate. Then find a discount rate that makes this project break-even. 2. (35 points) DigiPro is a computer manufacturing company active in Europe and Australia. Recently, DigiPro has decided to enter the healthcare market and produce dental examination kits. According to their estimations, the current market demand for this product is 50,000, and it will grow annually at 10%. DigiPro needs to determine the capacity of this new plant considering different cost and revenue components. The total cost of developing a manufacturing plant to produce these kits is $1,200,000. Each kit can be sold for $4. The unit production cost of each item is $0.6 Depending on the capacity, machine maintenance cost is $0.5 per capacity unit. Considering all these components, calculate the cash flow for the next 10 years. First, find the optimal capacity considering a 10% discount rate. Then find a discount rate that makes this project break-even
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